Imagine a practice with only daytime appointments, many referrals, large premiums, multiple products sold to a single decision-maker, and three or four new clients with each case. Welcome to the small business market.
Small business owners are passionate about their business and their families. And in most instances, they don’t automatically have the insurance options provided by a large employer. Filling this gap with “demand products”–health insurance, group disability insurance, retirement options and other solutions–offers tremendous opportunities to the life insurance agent.
Business owners know they should purchase these products, but they need good reasons to buy them from a particular agent. Once you’ve established trust with demand products, you can begin to introduce other products to the business owner, like life insurance.
People don’t hesitate to tell others about a great restaurant or movie they’ve seen but are often reluctant to shout publicly the praises of their life insurance agent. Yet with demand products, the psychology changes. People will often say, “I have a great retirement guy or a great benefits person. You should talk to him.”
In the small business market, referrals come more easily because the recommendation is not grounded in a personal product; it’s strictly business. Such recommendations are made willingly and fall under the heading of networking. Clients will refer you to other prospects, and professionals will refer you to their clients.
How to Get Started
You don’t need to become an expert on everything before you get started. In my practice, I position myself as a “business solutions specialist.” Rather than being product specific, I am “client specific.” I either have the knowledge in the relevant areas or “borrow” the knowledge from other trusted professionals.
For example, my knowledge of retirement plans is general. Fortunately, representatives from all the major retirement plan outlets call on me to sell their products and services. I can, in turn, tap into their expertise and know I’m bringing the right people to the table. You can do the same to overcome areas about which you are not completely knowledgeable.
Selling Demand Products
If you are a life insurance agent, you still can lead with demand products. I happen to be affiliated with a group of specialists that offer employee benefits services, including health care, so I have an in. But even if you do not offer health insurance, find a local firm through your NAIFA, AHIA or NAHU chapter with whom you could strike up an arrangement.
Perhaps you could receive a finder’s fee (20% is reasonable) to bring in a group case and maintain access to the individual life and disability insurance sales. Alternatively, there may be health brokerages that are not pursuing life and disability insurance opportunities. You might be able to build a reciprocal relationship with them.
When you are starting a business practice, choose one area and become an expert in it. I started in disability insurance and then moved to employee benefits. But you can start anywhere; no business owner expects you to be an expert in everything.
Transitioning to Other Areas
Usually I am referred to a small business case to manage a specific project. Once I have become friends with the owner, we can discuss other services that might benefit his or her business: retirement solutions, life and disability insurance, long term care insurance, employee benefits, among other offerings. Acquainting owners with other offerings is easier once you, the agent, have a level of trust. At that point, the owners realize you’re working with their best interest in mind.
Clients appreciate the added value and convenience of working with a full-service agent rather than several agents for individual products. So, if you lack expertise in a specific area, team up with specialists and service your client together. It creates a win-win situation for everyone. Capitalizing on this approach, I’ve been able to write more business per client.
What’s more, most business owners have a few key employees who are important to their success. These people make great prospective clients for you–and what better reference than their boss? By helping these key people achieve financial security, you are helping them and the business owner to grow.
Marketing to Small Business Owners
The key to a successful practice is having enough qualified prospective clients. The best way to assemble this list is by referral. I have in my practice three primary referral sources: current clients, CPA firms and law firms that focus on small businesses.
I can’t stress enough the importance of developing positive relationships with these centers of influence. Meet with them quarterly and build strong networking ties. You can solidify these relationships by speaking at their association meetings, publishing articles in trade journals, hosting educational seminars, or forming study groups to share ideas and discuss current issues.
Put Your Plan in Writing
The final piece of the puzzle is to develop a formal marketing plan and commit it to writing. Remember that insurance agents have a tendency to stop doing something once it starts to work. Put a staff member in charge of executing the plan, so you have a way to keep track of the things that need to be done. As an agent, it can be difficult to simultaneously “be the business” and “run the business,” so having a trusted staff member handle the plan and having good database software is important.
Ask For Help
Some of the best business advice I have ever received has come from people outside the insurance industry. Try to run your business like your clients do. By doing so, you’ll learn how to better service their needs and grow your business at the same time.